Tuesday, April 25, 2006

Bush orders inquiry into sky-high gasoline prices

First, the inquiry is political pandering plain and simple. While it's easy to claim that Bush's recent approval rating disasters are linked to Iraq and SCANDAL, as with all things political the surest bet is to follow the money, and in this case follow the money being shelled out by consumers at the pump. Gas is high; ridiculously so, and people are pissed. Heavy Lifting has a chart showing the inverse of gas prices and Bush's approval ratings, and it shows that as gas prices rise, Bush's approval drops. It stands to reason that something that directly effects the majority of Americans, i.e. gas prices, is going to weigh far heavier on their minds than something that is at best an abstract on the TV, i.e. Iraq or political scandals. So if Bush can appear to be indignant about oil prices and act like he's doing something to alleviate the problem, look for a bump in his approval ratings. I understand the move, but I don't support it. Why? Because the oil companies aren't causing the high prices. ExxonMobil earned $25.33 billion dollars in 2004. Where did it wind up on the list of most profitable companies? #127. That's right, the company that earned more money than any other corporation listed on the Fortune 500 wasn't the most profitable. In fact, the oil companies generally pull in around 10% profit (or $.10 per gallon sold), hardly the fleecing we're being told is happening by every camera loving politician (I'm looking at you, Harry Reid) and populist blowhard pundit (I'm looking at you Bill O'Reilly, and also wondering why liberals hate you even though you're pro-abortion, pro-gun control, and now anti-business. Take him liberals! Please! We don't want him!) around. So what really is causing the high gas prices, and what should Bush be probing? How about our own idiotic energy policy? Captain's Quarters has a good summary of the lunacy that is this nation's energy policy, and I'd like to add something on top of that. Next time you hear a politician railing against how evil the oil companies and their profits are, just remember that they are making 10 cents a gallon every time you fill up, while the federal government is getting 18.4 cents per gallon, not to mention what you are paying to your state and local governments, and then start to question exactly who is responsible for those high gas prices. I'll give you a hint....


Blogger Newspaper Hack said...

I disagree. Oil companies are making record profits and getting tax breaks. The "gas tax" thing is a red herring by politicians who have already been bought wholesale by the oil companies, like so much Saudi crude. During the Clinton administration, when I first started driving, gas was 70-odd cents a gallon. Now it's $2.85. Last time I checked, nobody put an extra $2 of taxes on every gallon.

But then, I've gotten six hours of sleep in three days, so I may not be all that coherent.

6:50 PM  
Blogger TNIRISHFAN said...

I don't know where I stand on this issue, I think I hate everyone involved.
Hack - One question: Any idea what crude was a barrel back then? I remember getting gas for 92 cents just 11 years ago, and being pissed when it went over $1.00. Oh well.

7:35 PM  
Blogger Todd Jones said...

hack - ten years ago we weren't using as much oil. with the continued and rapid industrialization of asia (namely china and india) the demand for oil has grown at a greater pace than ever. china alone actually uses the same amount oil today that the ENTIRE WORLD used a decade ago. the oil companies are making such huge profits because they are moving so much more volume, not because they are jacking up prices.

7:41 PM  
Blogger Josh said...

Profit is revenue minus expense. Expense = high salaries + million dollar retirement packages. You can't say that because the oil companies make 10% profit that they aren't jacking up prices. It just means that they are jacking up the expenses right along with it.

8:44 PM  
Blogger Todd Jones said...

josh makes an excellent point that companies can jack up expenses, but when it comes to a companies pulling in over 20 billion a year, a million dollar retirement package is a drop in the bucket. the real costs for oil companies are the high prices of exploration, especially considering the small percentage that actually pans out, and transportation.

9:07 PM  

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